Former Kmart head to settle SEC case for $5.5 million

Hoffman Estates, Ill. A Detroit court on Wednesday said that Charles Conaway, the former head of Kmart Corp., has agreed to pay $5.5 million to end long-running litigation with government regulators over the retailer's finances nearly 10 years ago.

The deal would stop Conaway's appeal of a court-ordered financial penalty for misleading investors before Kmart's bankruptcy filing in 2002.

The appeals court has agreed to send the case back to federal court in Detroit to handle the settlement.

Conaway had been ordered to pay more than $10 million after a jury last year found him liable. The Securities and Exchange Commission had accused Conaway of failing to tell investors that Kmart was delaying payments to suppliers to save cash in 2001.